Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 pounds, which cost $6 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $12,883 per batch. The additional processing also causes a 5% loss of product due to evaporation. a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2) October 6 Revenues Costs Income (Loss) Feedback. Sell Regular Columbian (Alternative 1) Check My Work Say Process Further into Decaf Columbian (Alternative 2) $ Differential Effect on Income (Alternative 2) $ b. Should Zing sell Columbian coffee or process further and sell Decaf Columbian? Process into Decaf Columbian ✔ c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to two decimal places. per pound
Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 pounds, which cost $6 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $12,883 per batch. The additional processing also causes a 5% loss of product due to evaporation. a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2) October 6 Revenues Costs Income (Loss) Feedback. Sell Regular Columbian (Alternative 1) Check My Work Say Process Further into Decaf Columbian (Alternative 2) $ Differential Effect on Income (Alternative 2) $ b. Should Zing sell Columbian coffee or process further and sell Decaf Columbian? Process into Decaf Columbian ✔ c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to two decimal places. per pound
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
8.)
Transcribed Image Text:Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 pounds, which cost $6
per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can
be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $12,883 per batch. The additional processing also causes a 5%
loss of product due to evaporation.
a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those
boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Sell Regular Columbian (Alt. 1) or Process Further into Decaf
Columbian (Alt. 2)
October 6
Revenues
Costs
Income (Loss)
Feedback
Sell
Regular
Columbian
(Alternative 1)
Check My Work
Process
Further into
Decaf
Columbian
(Alternative 2)
Differential
Effect
on Income
(Alternative 2)
b. Should Zing sell Columbian coffee or process further and sell Decaf Columbian?
Process into Decaf Columbian
✓
c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your
answer to two decimal places.
per pound
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education